Tags: midterms | elections | economy | trump | obamacare

History Shows October Economic Reports Could Swing the Midterms

History Shows October Economic Reports Could Swing the Midterms
President Donald Trump speaks during a press conference to discuss a revised U.S. trade agreement with Mexico and Canada in the Rose Garden of the White House on October 1, 2018, in Washington, D.C. (Chip Somodevilla/Getty Images)

By Monday, 01 October 2018 03:53 PM Current | Bio | Archive

While most folks are concentrating on the Kavanaugh hearings’ impact on the midterms, which party controls the House and Senate come January may come down to two sets of numbers to be disclosed in October — third quarter GDP and projected health insurance premiums for 2019.

There’s no doubt that history is on the side of the out-of-power party in midterms. But if there is one thing that can break the trend, it is a booming economy. And the 2017 tax cuts appear to be delivering on their desired effect of priming the economic pump.

A robust 4.2 percent GDP growth rate in the second quarter gives hope that the 1.6 percent sluggish growth in Obama's last year did not become the new normal.

The question is whether voters perceive this promising number as a blip or a sustainable trend that will yield annual plus-3 percent economic growth for the foreseeable future, encouraging voters to maintain the status quo.

If you don’t think that these numbers matter, reflect back on the unemployment stats released in October 2012. The polls showed President Obama and Republican Mitt Romney in a close dog fight that was within the Real Clear Politics polling margin of error. Many voters had serious trepidation over Obama's struggling recovery. Unemployment was starting to drop, but was stubbornly stuck for the past several months above 8 percent. Obama needed to show voters that they should stay the course because jobs were starting to flow. These October figures, the last before the election, would be crucial.

Breaking the 8 percent threshold was of great psychological significance. Lo and behold, the figure came in at 7.8 percent. Numerous observers smelled a rat, suspicious that the numbers were cooked.

Turns out they may have been right. Former GE chief, Jack Welch, thought so, as did NY Post columnist John Crudele, who wrote that a Census employee admitted to fudging numbers. If so, it was too late for Romney.

Now, go back to 2016, where Hillary Clinton was presumed by most pundits to be a shoo-in to continue the Obama legacy. Political scientists, seeking to explain the biggest upset in U.S. electoral history, cited James Comey or Clinton ignoring the rust belt as rationales. But, few focused on a report issued one month before the election that revealed that Obama’s healthcare costs were projected to skyrocket in 2017, as much as 141 percent in Arizona.

This number by itself did not tilt the election, but it certainly had at least some impact. Many reeling from Obamacare cost increases were still holding out hope that rates would stabilize, but this last minute report, confirming that rates were still skyrocketing, led many to conclude that a new approach was needed.

I wrote in this column months ago that the Republicans’ elimination of the Obamacare mandate could come back to bite the GOP in the midterms, because the loss of the revenue that is paid through the mandate will have to be made up by the remaining users.

If the report issued in October shows the type of increases originally estimated back in January by Covered California (that state’s official insurance marketplace) or the liberal Center for American Progress — that premiums will jump up to 30 percent — then Trump, and the Republicans who fought Obamacare with all their fibers, will nevertheless, fairly or not, own the healthcare dilemma and all its associated costs.

Since those original projections, however, many reports have been revising these estimates, including one from NPR last month suggesting that the increases might be only in the single digits. That’s a huge difference. Either number will impact at least some voters. And that could shift the balance of power in Congress. Stay tuned.

Steve Levy, former New York state assemblyman, Suffolk County executive, and candidate for governor, is now a distinguished political pundit. Levy's commentary has been published in such media outlets as Washington Times, Washington Examiner, New York Post, Albany Times, Long Island Business News, and City & State Magazine. He hosted “The Steve Levy Radio Show" on Long Island News Radio, and is a frequent guest on high profile television and radio outlets. Few on the political scene possess Levy’s diverse background. He’s been both a legislator and executive, and served on both the state and local levels — as both a Democrat and Republican. Levy published Bias in the Media, an analysis of his own experience, after switching parties, with the media's leftward slant. Levy is currently Executive Director of the Center for Cost Effective Government, a fiscally conservative think tank. He is also President of Common Sense Strategies, a political consulting firm. To learn more about his past work and upcoming appearances, visit www.stevelevy.info. To read more of his reports — Click Here Now.

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There’s no doubt that history is on the side of the out-of-power party in midterms. But if there is one thing that can break the trend, it is a booming economy. And the 2017 tax cuts appear to be delivering on their desired effect of priming the economic pump.
midterms, elections, economy, trump, obamacare
Monday, 01 October 2018 03:53 PM
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